Professional Documents
Culture Documents
Ross 1947
Ross 1947
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Introduction
In 1928 an eminent English economist complained that" ... all ex-
isting wage theories appear to ignore a phenomenon which has com-
pletely changed the whole condition of the labour market . . . namely
the rise to power of trade unionism, with all its consequences."'lEight-
een years later, an eminent American economist remarked that "little
is known about the determinants of union wage policies."2
As a matter of fact, there is a considerablebody of literature on wage
rates which recognizes the existence of unionism, but it suffers from a
conception of the union as a decision-making organism which is both
inadequate and incomplete. Research on the determinants of union
wage policies is currently in progress at a number of universities, but
there is danger that a similar misconception will defeat the purpose of
these efforts. Analysis of institutional policy must begin with an under-
standing of the institution itself.
Sympathetic authors often conceive of the union as a primitive, un-
differentiatedprotest group governed by town-meeting democracy: the
union becomes synonymous with its members. Hostile critics tend to
portray it as a dictatorship governed by an official bureaucracy: the
union here becomes synonymous with its leaders. Economic theorists
are prone to regard it as a monopolistic seller of labor governed by a
ipaximizationprinciple; the union thus becomes analogous to a business
firm marketing a commodity.
None of these images is sufficiently accurate to provide a suitable
basis for an analysis of trade union policy. To be sure, any theoretical
model must abstract from "the richness and complexity of behavior."3
Abstraction becomes falsification, however, when it so oversimplifies
human behavior as to leave it unrecognizable and unexplained.
The nature of the union as a representativepolitical agency should be
* This article has been condensed from a chapter from a monograph, now in preparation,
entitled Trade Union Wage Policy.
The author is a member of the staff of the School of Business Administration and Institute
of Industrial Relations, University of California, Berkeley.
1 J. W. F. Rowe, Wages in Practice and Theory (London, 1928), p. 194.
2 Sumner H. Slichter, "Wage-Price Policy and Employment," Am. Econ. Rev., Vol. XXXVI,
The formal purpose of the union is vaguer than that of the business
firm. Profit can be measured in one dimension.12 "Economic welfare" is
a congeries of discrete phenomena-wages, with a dollar dimension;
hours of work, with a time dimension; physical working conditions,
economic security, protection against managerial abuse and various
rights of self-determination,with no measurabledimensionat all. There-
fore, the union leader has considerably more discretion in interpreting
the formal purpose. If he is able to convince the rank and file that his
own interpretation is correct, there is no one else with the moral au-
thority to contradict him successfully; but a corporate manager would
find it difficult to convince his stockholders that a $2.00 dividend was
really $3.00. The inherent difficulty of measuring "economicwelfare" is
obvious whenever one union official attempts to persuade another that
he has negotiated the better contract.
Corporatemanagers must operate under the surveillance of cost ac-
countants, finance committees, etc., who have the function of navigating
leadership activities toward the accomplishment of the formal purpose
of the enterprise. Correspondingagencies in a rudimentary form are
sometimes found in union organization, but they are probably less of a
"drag" upon the leadership (and offer less help in the formulation of
policy), because the formal purpose of the union is less capable of meas-
urement. In many unions, constitutional provision is made for the
election of trustees, whose formal function is to serve as watchdogs of
the rank-and-file interest but whose chief activity, in practice, is to
guard the petty cash account against misappropriation.
The business firm sells goods or services, but the union does not sell
labor. It participates in the establishment of the price of labor, but the
sale is made between the worker and the employer. The union is not
mechanically or automatically concerned with the "quantity of labor
sold"-that is, in the number of workersemployed in the branch of the
economy over which it asserts jurisdiction. It is vitally concerned with
the size of union membership, but this is not the same as the number
of workers employed, except in the case where the industry is "100 per
cent organized" and the union has no desire to expand its jurisdiction.
This would be the apex of institutional maturity, a position in which the
only way to increase membership is by increasing employment. But in
the present stage of development of the labor movement, the "employ-
ment effect" will frequently differ from the "membership effect" and
may even move in the opposite direction. An upward wage adjustment
may bring in new members, even though the employer is reducing per-
sonnel. A downwardwage adjustment may bring about a wave of resig-
12 Though profit-and-loss accounting can be manipulated within fairly wide limits, profit is
must get down to earth and endeavor wherever we can to reach understandings with our em-
ployers without having recourse to a stoppage of work.... We should not use a strike except
as a last resort." Daniel J. Tobin in The International Teamster, Vol. XLVI (December, 1946),
p. 17.
23 "In many instances the states may outlaw the closed shop, but even without the closed
or union shop, men don't have to work with undesirable individuals or with non-union men."
Loc. cit.
24 Neil W. Chamberlain, Collective Bargaining Procedures (Washington, 1944), pp. 12, 53.
op. cit., Chaps. 1, 2, and 6; Shister, op. cit., pp. 529-32; Joseph Kovner, "Union Conventions,"
Laborand Nation, Vol. I (June-July, 1946), pp. 31-33.
down during the spring or summer in any event, because of the seasonality of demand for coal.
In addition, the frequency of prolonged strikes in the coal industry can be explained by the
social isolation of the miners, their exceptionally bitter sense of injustice, and the rigors of
underground work.
cautious advisers. They must take care not to overrun the limits of
discretion; but between these limits, the range of choice is quite con-
siderable.
Negotiations proceed unsatisfactorily, and the rank and file is asked
to take a strike vote. This is a ritual affirmationof solidarity, a symbolic
gesture to impress the employer. To vote "no" would be equivalent to a
complete nullification of the union's bargaining power, an act of total
disarmament during a crisis in foreign relations. An affirmative strike
vote does not necessarily mean that the membership is desirous of
striking; as a matter of fact, in the great majority of cases, an affirmative
vote is not succeeded by a strike. The strike vote is merely a vote of
confidence in the leadership, taken at a time when it can hardly be
denied.
It is for this reason that the strike-vote procedure of the Smith-
Connally Act proved so ineffective. The procedure was based on the
illusory hope of driving a wedge between the rank and file and the
leadership. Many thousands of strike votes have been conducted by the
National Labor Relations Board; although statistics are not available,
one may venture to guess that more than 95 per cent have been affirma-
tive. The only effect of the provision was to instill the habit of securing
an affirmative vote at the outset of negotiations, a solemn ceremony
which occasioned no end of merriment among union and employer
representatives.30
The membership is asked whether it wishes to approve or reject the
employer's offer, which the union officials may have tentatively ac-
cepted, subject to ratification. On this occasion, much depends upon
the manner in which the offer or tentative agreement is presented. The
rank and file wishes to know whether it is the best obtainable. Somehow,
the officials must communicate an answer. They may point out the
flaws in the offer, in which case it will surely be rejected. They may
present it without recommendation, in which case it has no more than
a ten per cent chance of acceptance. Only when they give it vigorous
support is it likely to be ratified. If it matches the expectations of the
rank and file, it will be described as "the best contract in the industry."
30 A variant of this
procedure, proposed by the National Association of Manufacturers
in its ten-point labor program, has been incorporated in the Taft-Hartley Act. In "national
emergency" cases, when the parties are still in disagreement at the end of the cooling-off
period, the National Labor Relations Board Tilltake a secret ballot among the workers to
determine whether they will accept the employer's latest offer. It will be noted that this
proposal calls for a strike vote at the conclusion rather than the outset of negotiations. How-
ever, there is every probability that the rank and file will continue to take their cue from
the union officials. In the first place, the rank and file cannot be sure that the employer's "latest
offer" is actually the best offer which he is prepared to make. In the second place, they do not
know whether a strike is likely to be short or long; obviously this makes a great deal of differ-
ence.